China to boost non-fossil fuel use to 20 percent by 2030: state planner

25 Apr 2017   China

China aims for non-fossil fuels to account for about 20 percent of total energy consumption by 2030, increasing to more than half of demand by 2050, its state planner said on Tuesday, as Beijing continues its years-long shift away from coal power. In a policy document, the National Development and Reform Commission said carbon dioxide (CO2) emissions will peak by 2030 and total energy demand will be capped at 6 billion tons of standard coal equivalent by 2030. (Reporting by Josephine Mason; Editing by Christian Schmollinger)

Converting Coal Would Help China’s Smog At Climate’s Expense

25 Apr 2017   China, Climate

China’s conversion of coal into natural gas could prevent tens of thousands of premature deaths each year. But there’s a catch: As the country shifts its use of vast coal reserves to send less smog-inducing chemicals into the air, the move threatens to undermine efforts to rein in greenhouse gas emissions, researchers said Tuesday. The environmental trade-off points to the difficult choices confronting leaders of the world’s second largest economy as they struggle to balance public health and financial growth with international climate change commitments. Between 20,000 and 41,000 premature deaths annually could be prevented by converting low-quality coal in the country’s western provinces into synthetic natural gas for residential use, according to the findings of researchers from the United States and China published in the Proceedings of the National Academy of Sciences. If the gas were used for industrial purposes, fewer deaths would be averted […]

Russia elbows Saudi Arabia aside as China’s top crude oil supplier in March

25 Apr 2017   China, Russia

Workers look at a drilling rig at a well pad of the Rosneft-owned Prirazlomnoye oil field outside the West Siberian city of Nefteyugansk, Russia, August 4, 2016. Russia reclaimed its position as China’s biggest crude oil supplier in March, customs data showed on Tuesday, displacing Saudi Arabia after two months in second place as Moscow fights to hang on to its slice of the Chinese market. Russian shipments grew nearly 1 percent to 1.104 million barrels per day (bpd) from the same month a year earlier, as China’s private refineries maintained high processing rates and restocked inventories after receiving fresh 2017 import quotas. China’s crude imports rose to a record in March, overtaking the United States and shattering expectations. Saudi shipments were 1.072 million barrels in March, up nearly 15 percent from a year ago, the General Administration of Customs said. For the first three months, Saudi arrivals stood […]

Exclusive: China gathers state-led consortium for Aramco IPO – sources

20 Apr 2017   China, Saudi Arabia

China is creating a consortium, including state-owned oil giants and banks and its sovereign wealth fund, that will act as a cornerstone investor in the initial public offering of Saudi Aramco, people with knowledge of the discussions told Reuters. Saudi Aramco, a key exporter to China along with Russia’s Rosneft ( ROSN.MM ), is due to list next year, with a potential $100 billion equity sale that is expected to be the world’s largest to date. The planned Chinese investment makes it more likely that the national energy giant would seek a listing in Asia, with Hong Kong currently the frontrunner among bourses in the region, the same people said. Reuters reported earlier this month that Saudi Aramco’s board would meet in Shanghai in May, its first meeting in […]

China talks clean energy with Canada

20 Apr 2017   Canada, China

Chinese officials discussed clean energy during talks with the Canadian prime minister as both economies look to diversify their energy sectors. File photo by Stephen Shaver/UPI April 19 (UPI) — Clean energy and technologies related to the fight against climate change are some of the ways to foster trade with Canada, the Chinese premier said. Canadian Prime Minister Justin Trudeau spoke by phone late Tuesday with his Chinese counterpart, Li Keqiang. A readout of the meeting from the official Xinhua News Agency stated that both sides discussed bilateral opportunities in energy. The two leaders expressed willingness to expand bilateral trade and investments, the official newspaper reported. “The two countries should also strengthen cooperation on tackling climate change and cooperate in new areas such as clean energy to create new growth points in the relationship,” Li said. Many of the export metrics trended lower for Canada in 2015 and unemployment […]

Chinese economy growing while oil production shrinks

18 Apr 2017   China

China reports better-than-expected economic growth, but lower domestic crude oil production. File photo by Stephen Shaver/UPI. April 17 (UPI) — While posting better-than-expected growth for the first quarter, the Chinese statistics bureau said Monday that crude oil production was down from last year. China reported crude oil production down 6.8 percent compared with the first quarter of 2016. The National Bureau of Statistics reported Monday that national output was lower because industry costs were elevated, oil imports increased and refineries curbed activity. According to the official Xinhua News Agency, China produced 350 million barrels of oil during the first quarter. The official news agency stated that “accelerating exploration to ensure domestic oil supply, speeding up construction of pipeline networks and developing clean alternatives” are among the national priorities for the Chinese energy sector. According to pricing agency S&P Global Platts, China’s oil demand is up 5.3 percent year-over-year because […]

China first-quarter GDP grows 6.9 percent year-on-year, better than expectations

18 Apr 2017   China

Workers work at a construction site in front of Shanghai’s financial district of Pudong in Shanghai, China March 27, 2017. China’s economy grew 6.9 percent in the first quarter from a year earlier, slightly faster than expected, supported by a government infrastructure spending spree and a frenzied housing market that is showing signs of overheating. Analysts polled by Reuters had expected the economy to expand 6.8 percent in the first quarter, the same pace as in the fourth quarter of 2016. The first-quarter growth pace was the fastest since the third quarter of 2015. The government is aiming for growth of around 6.5 percent in 2017, slightly lower than last year’s target of 6.5-7 percent and the actual 6.7 percent, which was the weakest pace in 26 years. While China’s data has been largely upbeat so far this year, many analysts widely expect the world’s second-largest economy to lose […]

Behind China’s Pickup in Growth: the Strong Hand of the State

18 Apr 2017   China

China on Monday posted its strongest quarterly growth in a year and a half, underlining how the fate of the world’s second-largest economy has tilted further into government hands. The reported growth pace of 6.9% in the first quarter was the result of better-than-expected investment, industrial production and building starts for March—all evidence that last year’s easy-money policies and infrastructure spending have…

China data: March crude throughput rises 6% on year to 11.23 mil b/d

18 Apr 2017   China

China’s crude refinery throughput in March rose 5.9% year on year to 47.5 million mt, or an average of 11.23 million b/d, preliminary data released Monday by the National Bureau of Statistics showed. This was the highest year-on-year growth in refinery runs since September 2015. The last highest year-on-year growth in refinery runs was 6.5% in August 2015. On a daily basis, however, the refinery throughput was slightly down from the average of 11.28 million b/d over January-February. The average for the first two months of the year was combined as NBS does not provide separate data for January and February. The drop in refinery runs was somehow in line with the trend showed by a survey done by S&P Global Platts in March — some of the largest state-owned refiners in China saw average utilization rate move down to 79% of nameplate capacity, compared with 85% in February […]

China’s robust commodity imports as good as it gets, for now: Russell

18 Apr 2017   China

It’s probably best to look at China’s extremely strong commodity imports in March as a history lesson, rather than a pointer to future trends. Record high imports of crude oil, the second-most for iron ore and a 34 percent surge in the first quarter for coal from the same period in 2016 all speak of robust demand in the world’s importer of commodities. However, the chances are that this is as good as it gets, at least for a while. This isn’t to suggest that commodity imports are due for a sharp pullback in coming months, rather the likelihood is that they will moderate back toward more sustainable growth rates. Crude oil imports surged 22.6 percent from February to 38.95 million tonnes, equivalent to about 9.17 million barrels per day (bpd). This was […]

China March steel output climbs to highest on record

17 Apr 2017   China

China’s steel output rose 1.8 percent in March to a monthly record of 72 million tonnes, stoking worries of a glut that continues to grow even as Beijing tries to rein in excess capacity in the bloated sector and demand remains flat. March’s monthly total easily beat the previous record of 70.65 million tons hit in March 2016, data from the National Bureau of Statistics showed on Monday. In the first quarter, production totaled 201.1 million tons, up 4.6 percent from the same period a year earlier, the data also showed. The growing production as Chinese mills bid to profit from prices that soared in 2016 and into this year are undermining the government’s years-long push to cut capacity to make the steel industry more efficient and […]

Chinese economy grows 6.9% in first quarter

17 Apr 2017   China

China’s economy has started 2017 with its strongest quarterly performance in 18 months, on the back of a surge in industrial activity, property investment and credit growth. The country’s gross domestic product grew at an annual rate of 6.9 per cent in the first quarter of 2017, slightly higher than analysts’ consensus expectations. Growth was strongest towards the end of the three-month period, suggesting that momentum was building into the second quarter of 2017. The strength of China’s industrial sector was augmented by growth in Chinese credit — including shadow lending outside the formal banking sector — and a bullish turn in commodities that began last year. The seeming stability of China’s official growth figures can mask big swings in the world’s largest economy. Real GDP growth for the first three months of 2017 was the strongest since the third quarter of 2015, while nominal growth was the highest since March 2012. This quarter’s positive figures come in a year of expected consolidation of power by President Xi Jinping, whose second term as head of the ruling Communist party will begin later this year following the country’s 19th national congress.

China data: March raw coal output posts first rise since Feb 2015

17 Apr 2017   China

China’s raw coal production in March increased 1.9% year on year to 300 million mt, the first rise since February 2015, the National Bureau of Statistics said Monday. First-quarter raw coal production dropped 0.3% year on year to 810 million mt. Production growth in 25 provinces, such as Inner Mongolia, Guizhou, Yunnan, Shanxi and Ningxia, was more than 5% year on year while 20 provinces posted falls in production, especially Jiangxi, Hubei and Chonqin, with output falling more than 30% year on year. The NBS said production at small- to medium-sized miners in Jiangxi, Hubei and Chonqin was hit by the central government’s move to eliminate certain capacities. Chinese power generation in March increased 7.2% on the year to 516.89 TWh. Total Q1 generation was up 6.7% on year at 1,458.72 TWh. Thermal power generation in March rose 7.7% year on year, while Q1 thermal power generation was up […]

China Ready To Cut Oil Supplies To North Korea

14 Apr 2017   China, North Korea

Beijing’s patience with North Korea is wearing thin as Pyongyang continues to conduct nuclear missile tests. According to a state Chinese media outlet, Huanqui, China is considering a suspension of its crude oil exports to its neighbor should North Korea conduct a sixth nuclear test. North Korea depends on China for 90 percent of its crude oil supply, and stopping these will wreak havoc on the dictatorship, which China has been trying to avoid, since a regime collapse is likely to result in a massive influx of refugees. It has also opposed President Trump’s urging to penalize North Korea for the nuclear tests so far, but now it seems the mood is changing – having another nuclear neighbor is hardly China’s idea of a stable regional environment. Asia’s biggest economy also has other ways to make Kim Jong Un give up nuclear tests, such as stopping or reducing the […]

China’s Electric Vehicle Market Is Unbeatable

14 Apr 2017   China, Electric Cars

Ford Motor Co. just announced an ambitious electrification strategy for China. The global Mondeo sedan will see the Mondeo Energy plug-in hybrid launched there early next year, followed by an all-electric small SUV a few years later that will go about 280 miles on one charge. The Detroit automaker sees 70 percent of all Ford nameplates coming with an electrified option to China by 2025; that will include all of its products manufactured jointly through Ford’s state-mandated joint venture partner, Changan Ford JV. Ford will be adding manufacturing facilities to meet the targets. Ford is taking a more tepid approach to the U.S. market with a small number of electric models for sale. Ford CEO Mark Fields has also asked President Donald Trump to take a more conservative approach to federal fuel economy and emissions guidelines than enacted by the Obama administration shortly before leaving office. Tesla reported making […]

China Takes Crude Crown as Output Lags Behind Rising Demand

13 Apr 2017   China
China Takes Crude Crown as Output Lags Behind Rising Demand

China’s record oil imports in March helped it top the U.S. as the world’s biggest buyer during the first quarter as stockpiling and aggressive buying by refiners coincided with slumping domestic production. on barrels a day, up 11 percent from February, according to Bloomberg calculations based on data Thursday from the General Administration of Customs. Shipments during the first quarter rose 15 percent to almost 105 million tons, or about 8.5 million barrels a day. The U.S. imported almost 8.15 million during the first three months, Bloomberg calculations using weekly data show.

While the jump in March was seen as temporary, growing use of transportation fuels, new refineries and an expansion of emergency reserves have put China on a steady rise toward challenging the U.S. as the world’s biggest importer. Buying last month was likely boosted by stockpiling and purchases from the country’s independent oil refiners, which raised their processing of imported crude to a record last month, according to analysts from ICIS China, Citigroup Inc. and Energy Aspects Ltd.  “We could see a sharp drop in April following this surge,” Li Li, a research director with ICIS China, said by phone.

March shipments will result in a “fairly high” stockpile buildup and likely flowed into tanks leased for the country’s strategic petroleum reserves as the start of the newest government-owned storage is delayed, Citigroup analysts including Tracy Liao said in a note Thursday.  “Teapot buying was strong in March, although the strength does surprise us,” said Virendra Chauhan, an analyst at London-based Energy Aspects, using the industry term for independent refiners. “We don’t think 9 million barrels a day is a level that is likely to be maintained and helps explains why buying has eased up and regional markets have softened.”

China Opens Delayed Myanmar Oil Pipeline to Get Mideast Crude Faster

12 Apr 2017   China, Myanmar

Pipeline operations start as crude unloaded at Made Island Tanker United Dynamic arrived from Turkey on April 9: data A crude pipeline to southwestern China through its neighbor Myanmar began operations after years of delays, allowing the world’s second-biggest oil user to receive supplies faster from the Middle East and Africa. A Suezmax-sized tanker, which can hold 140,000 metric tons (about 1 million barrels) of crude, began offloading oil for the pipeline on Monday at Myanmar’s Made Island, according to China’s official Xinhua News Agency. Operations on the line, which was completed in 2014 and originally scheduled to start the same year, are beginning after the government of Myanmar agreed to lower transit fees, Wang Dongjin, president of PetroChina Co., said last month. The link, which allows China to import crude from the Middle East and Africa without having to ship through the Straits of Malacca and into the […]

China’s 2017 thermal imports to surge by 30 million mt over 2016: Noble

11 Apr 2017   China

China’s thermal total coal import in 2017 is expected to surge by about 30 million mt over that in 2016, on the back increasing power generation, according to Noble Group. “The fundamentals in the coal market changed last year,” Rodrigo Echeverri, head of Noble Group’s energy coal analysis, said at the Coaltrans Conference in Shanghai on Monday. He said that there has been a demand shock in the thermal coal market without a supply response, which has helped support the prices. China’s thermal coal import during the first quarter of 2017 was about 12 million mt more than Q1 2016’s imports, Echeverri said. He pointed out that China’s thermal power generation in Q1 2017 increased 7% over Q1 2016’s, while output of coal increased by only about 4%. “Import of coal is very important for power producers and cement manufacturers in South China and they don’t have a ceiling […]

Ford to Make Electric Cars in China Amid Green Drive

8 Apr 2017   China

Ford Motor Co. said Thursday that it would start building electric cars in China to tap into a state-sponsored boom in green-energy vehicles. In doing so, the Detroit-based company signaled that it had swallowed industry concerns about bringing proprietary electric-car technology to China, despite misgivings among foreign auto makers about intellectual-property protection in the world’s largest auto market. “It’s…

Rising Waters Threaten China’s Rising Cities

7 Apr 2017   China

The rains brought torrents, pouring into basements and malls, the water swiftly rising a foot and a half. The city of Dongguan, a manufacturing center here in the world’s most dynamic industrial region, was hit especially hard by the downpour in May 2014. More than 100 factories and shops were inundated. Water climbed knee-high in 20 minutes, wiping out inventory for dozens of businesses. Next door in Guangzhou, an ancient, mammoth port city of 13 million, helicopters and a fleet of 80 boats had to be sent to rescue trapped residents. Tens of thousands lost their homes, and 53 square miles of nearby farmland were ruined. The cost of repairs topped $100 million. Chen Rongbo, who lived in the city, saw the flood coming. He tried to scramble to safety on the second floor of his house, carrying his 6-year-old granddaughter. He slipped. The flood swept […]

China Just Became The No.1 Buyer Of U.S. Crude

6 Apr 2017   China

While OPEC is implementing production cuts, U.S. crude oil exports are steadily growing and winning customers even in China. In February, China was the biggest buyer of U.S. light crude oil, overtaking Canada as the top destination of U.S. crude exports. According to data by the U.S. Census Bureau crunched by Bloomberg, U.S. crude sales in China jumped almost fourfold in February compared to January, to 8.08 million barrels, versus the 6.84 million barrels of oil that Canada imported from the U.S., which was a 20-percent monthly drop. U.S. crude oil exports reached a record high of 31.2 million barrels in February, the data showed. U.S. crude oil exports to China started surging in November last year, according to data by the EIA available through January this year. In January, China bought 2.003 million barrels of U.S. crude. By comparison, U.S. oil exports to Canada stood at 8.538 million […]

China’s oil demand resilient in early 2017 as industrial sector shines

6 Apr 2017   China

China’s apparent oil demand rose 5.3% year on year in the first two months of 2017 to 11.65 million b/d on the back of robust economic growth, holiday transportation demand and efforts to build stocks ahead of the refinery maintenance season that started in March. Oil products across the barrel witnessed year-on-year demand growth over January-February, with LPG witnessing strongest growth of 24.8%, while gasoil demand rose 0.4%, rebounding from year-on-year declines since December 2015. China’s industrial production grew 6.3% on year over January-February, beating expectations of 6.2% and accelerating from 6% in December. Fixed asset investment grew 8.9% in the two-month period, accelerating from 8.1% in December, according to data from the National Bureau of Statistics. These factors helped to lift gasoil consumption in the transportation and construction sectors. The week-long Chinese New Year holidays also pushed up demand for transportation fuels gasoline and jet fuel. A significant […]

China Surpasses Canada as Top Buyer of U.S. Crude

5 Apr 2017   China

China became the biggest buyer of U.S. crude oil in February, surpassing Canada, at a time when OPEC is cutting back output. China imported 8.08 million barrels of U.S. light crude, nearly quadrupling its January purchases, according to data released by the U.S. Census Bureau Tuesday. That helped boost U.S. exports to a record 31.2 million barrels during the month. Canada, the U.S.’s largest trade partner, imported 6.84 million, down 20 percent from a month earlier. The surge in U.S. shipments to Asia, a market long dominated by Saudi Arabia and other Middle East producers, comes as the Organization of Petroleum Exporting Countries trims output in an effort to end a glut that battered the economies of global energy exporters. Saudi Arabia reduced its pricing for some of its April crude sales to Asia as supplies from the U.S. became more competitive. “The U.S. is a larger exporter of […]

Beijing issues air pollution orange alert

4 Apr 2017   China, Climate

Beijing upgraded its alert for air pollution to orange Monday afternoon, the second highest warning. The smog, affecting Beijing and adjacent Tianjin and Hebei, is forecast to last until Friday. Beijing had issued the yellow alert early Monday morning, but the density of hazardous fine particle matter PM2.5 continued to grow. “The wind is not strong enough and the air quality is likely to get worse,” said the Beijing Municipal Environmental Protection Bureau. The Beijing Municipal Environmental Monitoring Center forecasts that PM2.5 readings will be between 200 and 220 micrograms per cubic meter Tuesday. Under the orange alert, outdoor paint and construction is suspended; trucks carrying garbage, sand and soil are taken off roads; and outdoor activities in kindergartens, middle schools and primary schools are stopped. Beijing has a four-tier color alert system for pollution, with red being the highest, followed by orange, yellow […]

China steps up pollution check as smog blankets areas near Beijing

3 Apr 2017   China

China’s environmental inspectors intensified pollution checks around Beijing as a new round of smog hit the region. The new round of air pollution will continue in the Beijing-Tianjin-Hebei region between April 3 and 7, with the cities of Tianjin, Tangshan, Langfang, Puyang and Anyang issuing orange alerts, the second highest in the country’s four-tier warning system. To ensure policies on fighting air pollution, the Ministry of Environmental Protection said on its website that seven teams have been sent to Beijing, Tianjin as well as the cities of Shijiazhuang, Tangshan, Baoding, Xingtai and Anyang in neighboring Hebei and Henan provinces. Inspectors found several companies in Tianjin and Baoding had failed to meet requirements for cutting pollutants, while some vehicles in Beijing failing to meet emission requirements. The ministry urged local authorities to address the problem. China has been under growing pressure to address air pollution […]

China wades into oil basins off the West African coast

1 Apr 2017   China, Senegal

Prospects for expanding the footprint in emerging oil basins off the Senegalese and Gambian coasts has increased through a Chinese partnership, FAR Ltd. said. FAR Ltd., an Australian company with a heavy focus on oil basins off the coast of Africa, said it entered into a partnership with the British subsidiary of China National Offshore Oil Corp. that defines areas of mutual interest off the coast of Gambia and Senegal. The deal gives both companies the ability to partner up on evaluating, bidding, negotiating and managing any joint ventures or buy-in opportunities for oil and gas in the broader Mauritania-Senegal-Guinea-Bissau deepwater basin. FAR Managing Director Cath Norman said in a statement that her company has […]

Glencore Sells Oil Storage Assets to China’s HNA Group

1 Apr 2017   China

Glencore PLC, one of the world’s biggest oil traders, has agreed to sell a majority stake in its petroleum products storage and logistics business for $775 million in cash to Chinese conglomerate HNA Group. The move comes as China’s demand for oil storage ramps up amid rising consumption by its expanding urban population. China is the world’s second largest oil consumer, behind the U.S. HNA Group will purchase a 51% stake in…

China steps up Americas oil imports, Unipec backs ‘new frontier’

31 Mar 2017   China

China’s largest crude oil buyer Sinopec aims to ship more cargoes from Brazil, the United States and Canada, to help ensure stable crude supplies as the Middle East boost refining capacity and Africa suffers disruptions. Shipments from the Americas hit an all-time high in March, boosting the region’s share of the Chinese market by 1.1 percentage points in the first quarter to close to 14 percent, data from Thomson Reuters Oil Research & Forecasts showed. “We’re facing a big challenge on the supply side,” said Chen Bo, president at Unipec, which purchases crude for Asia’s largest refiner Sinopec ( 0386.HK )( 600028.SS ). Asia needed to step up crude imports from the “new frontier”, the greater U.S. Gulf Coast […]

China’s coal-fired generation strong despite renewables push: Citi

31 Mar 2017   China

China’s coal-fired power generation as a percentage of the total energy mix is on the rise for the second year, despite the push towards renewable capacity additions in the country, Citi analysts said Friday. The share of thermal power in the generation mix declined to 73% in 2015 from 83% in 2011. Thermal has since grown to 74% of the mix in 2016 and to 78% in January-February this year, the analysts said. “Hydropower generation was down 5% year on year in January-February 2017 and that contributed to thermal power growing faster than overall power demand,” they said. A 5% growth in China’s coal-fired power generation would mean an additional consumption of about 65 million mt of coal, with the size of the entire seaborne market at about 850 million mt, the analysts said. China’s January-February total coal imports have surged 48.5% year on year to 42.61 million mt, […]

China’s manufacturing activity expands in March

31 Mar 2017   China

Photo taken on Feb. 24, 2017 shows workers carrying a monocrystalline silicon stick at a factory in Ningjin County, north China’s Hebei Province. China’s manufacturing purchasing managers’ index (PMI) came in at 51.6 percent in February, 0.3 percentage points higher than that recorded in January, according to data released on March 1 by the National Bureau of Statistics (NBS). (Xinhua/Mu Yu) BEIJING, March 31 (Xinhua) — China’s manufacturing sector in March stayed above the boom or bust mark for the eighth month in a row, fresh evidence of a stabilizing economy, said the National Bureau of Statistics (NBS). The country’s manufacturing purchasing managers’ index (PMI) came in at 51.8 in March, higher than 51.6 recorded in February, according to NBS data released Friday. A reading above 50 indicates expansion, while a reading below 50 reflects contraction. This also marked the second consecutive month that the expansion rate of the […]

For Commodity Prices, China’s Output Is Becoming a Growing Factor

30 Mar 2017   China

Chinese demand has long been the driving force in many global commodity markets. Now, expectations of falling production of goods from aluminum to coal are moving prices and getting more attention from investors. For example, last year, the world’s No. 2 economy upended the global coal market by restricting the working days of the country’s producers to 276 from 330. The decision triggered a 25% jump in Chinese imports and a surge in…

China likely to keep oil product exports steady to lower in H1 2017: sources

30 Mar 2017   China

China is highly likely to restrict oil product exports in the first half of 2017 to flat or below H1 2016 levels amid growing focus on pollution control, curbing excess capacity and international trade flows, sources with knowledge of the matter said this week. The total export quota for the second quarter was likely to be calculated based on the actual outflow in H1 2016 minus the quota allocated in Q1 2017, a Beijing-based senior product trader with a state-owned oil giant said. China exported 16.817 million mt of oil products in H1 2016 and awarded 12.4 million mt of quotas in Q1 2017, implying that the Q2 2017 oil product export quotas will be somewhere between 4 million mt to 5 million mt, according to calculations by sources. This is only one third the volumes allocated in Q2 2016, which was at 14.59 million mt, and is a […]

The Dark Legacy of China’s Drive for Global Resources

29 Mar 2017   China

For the past 35 years, I’ve worked as an ecologist in the Amazon, Africa, and the Asia-Pacific region on an array of environmental issues, mostly revolving around tropical forests, biodiversity, and the drivers of land use and climate change. I’ve seen many things — some good, some amazing, some heart-rending. But I’ve never seen a nation have such an overwhelming impact on the earth as China does now. Across the globe, on nearly every continent, China is involved in a dizzying variety of resource extraction, energy, agricultural, and infrastructure projects — roads, railroads, hydropower dams, mines — that are wreaking unprecedented damage to ecosystems and biodiversity. This onslaught will likely be made easier by the Trump administration’s anti-environmental tack and growing disengagement internationally. To be fair, China is also engaged in green activities, such as investing heavily in solar and wind energy , cracking down on its notorious air […]

China’s Sinopec Says Saudi Aramco Invited It to Be Investor

28 Mar 2017   China, Saudi Arabia

China Petroleum & Chemical Corp. said it was invited to invest in Saudi Arabian Oil Co. as part of what could be the world’s biggest-ever initial public offering. Talks are ongoing between the companies known as Sinopec and Saudi Aramco, Wang Yupu, chairman of the Chinese refiner, said on Monday. During a visit to China this month, Aramco’s chief executive officer Amin Nasser told officials he hoped the company could invest in the listing, Wang said. Saudi Arabia is preparing for the flotation by deepening relationships with its biggest buyers and locking in future demand for its oil. Saudi King Salman bin Abdulaziz led a delegation to Asia this month that saw the Middle East explorer pledge at least $13 billion worth of investments in refining projects. “We talked with them on the plan, and generally speaking we had a very good conversation,” Wang said of the offer from […]

China Tanked Oil Once, It Can Do It Again

27 Mar 2017   China

China has a knack for putting stars in commodity executives’ eyes, and then knocking them out. With oil once again under pressure—global benchmark Brent is down 10% since the beginning of March—investors are firmly focused on buoyant U.S. supply as the main risk factor for further declines. But as with a few years ago, it is weaker demand from China that could deliver a punch to staggering oil markets. Late 2013 and most of…

In Rare Move, Chinese Think Tank Criticizes Tepid Pace of Reform

27 Mar 2017   China

BEIJING — China ’s ambitious plan to revamp its economy has bogged down. Flabby state conglomerates have thwarted attempts to whip them into commercial shape. Rules that treat millions of city-dwelling rural migrants like second-class citizens have barely budged. Such criticisms are common from skeptical foreign economists who have long argued that President Xi Jinping ’s efforts to remake China’s economy and fix pernicious social problems have been too slow and tepid. But these withering findings on China’s reforms come from a startling place: from within the government itself. Just as striking, this unflattering report card from a Chinese state think tank — published this month with little fanfare — faults misconceived “top-level design” in policies, as well as local bureaucrats and state managers reluctant to change. It concludes: “Reform has to some extent fallen into stalemate.” The report brings into focus a sharpening debate in China about economic […]

PetroChina Mulls $85 Billion Spinoff

24 Mar 2017   China

PetroChina may be considering a spinoff for its oil and gas pipeline business, which could be worth as much as $85 billion, according to investment analysts. The suggestion has been sparked by expectations that China’s largest oil producer will report its worst financial figures in history, and by energy industry reforms being drafted by the central government. The network spans across China, from the west to the east, supplying crude oil and natural gas to all major cities in the country. Its total length is 48,200 miles, of which more than 65 percent is natural gas pipelines. As a whole, PetroChina is the biggest oil and gas pipeline operator in China, with a 71-percent market share. Back in 2015, Bloomberg recalls, the Chinese government had plans to take the pipeline business away from PetroChina and peer Sinopec, and unite them into a separate company. These plans have been dropped, […]

Climate Change May Be Intensifying China’s Smog Crisis

24 Mar 2017   China, Climate

Chinese leaders, grappling with some of the world’s worst air pollution, have long assumed the answer to their woes was gradually reducing the level of smog-forming chemicals emitted from power plants, steel factories and cars. But new research suggests another factor may be hindering China ’s efforts to take control of its devastating smog crisis: climate change . Changing weather patterns linked to rising global temperatures have resulted in a dearth of wind across northern China, according to several recent studies, exacerbating a wave of severe pollution that has been blamed for millions of premature deaths. Wind usually helps blow away smog, but changes in weather patterns in recent decades have left many of China’s most populous cities poorly ventilated, scientists say. The findings, some of the first to link climate change to smog, may escalate pressure on Chinese leaders to move more swiftly to shutter steel […]

Saudi Aramco inks term crude supply with China’s CNOOC for Huizhou refining project

24 Mar 2017   China, Saudi Arabia

Saudi Aramco has signed a one-year crude supply contract with China National Offshore Oil Corp. for its upcoming Phase 2 Huizhou refining project, as Saudi Arabia steps up efforts to secure its share in its largest market, where its top supplier status was recently threatened. Under the contract that was signed earlier this year, the Saudi national oil company will supply one VLCC per month of Arab Medium crude oil to CNOOC for a year, starting from the second half of 2017, sources close to the two companies said Wednesday. CNOOC expects to start up the 200,000 b/d Phase 2 project in Huizhou, southern China, in May 2017. CNOOC may also consider raising the lifting volume of Saudi crude once the Phase 2 project is running, one source said. The initial volume translates to a total supply of 22 million-26 million barrels over 12 months, considering each VLCC can […]

China’s Sinopec buys first major African refinery in Chevron deal

23 Mar 2017   China, South Africa

China’s Sinopec ( 600028.SS ) ( 0386.HK ) said on Wednesday it has agreed to pay almost $1 billion for a 75 percent stake in Chevron Corp’s ( CVX.N ) South African assets and its subsidiary in Botswana, securing its first major refinery on the continent. China Petroleum and Chemical Corp, or Sinopec, Asia’s largest oil refiner, said the assets include a 100,000 barrel-per-day oil refinery in Cape Town, a lubricants plant in Durban as well as 820 petrol stations and other oil storage facilities. They also include 220 convenience stores across South Africa and Botswana. With a growing middle class, demand in South Africa for refined petroleum has increased by nearly 5 percent annually over the past five years, to currently total about 27 million tonnes, it said. Sinopec said it would […]

Beset by delays, Myanmar-China oil pipeline nears start-up

22 Mar 2017   China, Myanmar

Nearly a decade in the making, a project to pump oil 770 km (480 miles) across Myanmar to southwest China is set for imminent start-up, with a supertanker nearing the port of Kyauk Phyu, marking the opening of a new oil trading route. Dogged by sensitive relations between Naypyitaw and Beijing, the $1.5 billion oil pipeline has been sitting empty for two years, but the two sides are now close to a deal, said Myanmar-based government and industry sources, despite some last-minute tensions. An agreement between China’s PetroChina and Myanmar’s government will allow the state energy giant to import overseas oil via the Bay of Bengal and pump it through the pipeline to supply a new 260,000-barrels-per-day (bpd) refinery in landlocked Yunnan province. The new […]

Japan’s Top Oil Experts Seek Solutions to Chinese Fuel Flood Problem

22 Mar 2017   China, Japan

Huddled deep within Tokyo’s government district, nearly two dozen of Japan’s top oil experts pore over a problem plaguing its energy industry: how can they stop China from pushing its crude refiners into a corner? The task force, summoned by the trade ministry, needs a strategy to save oil refiners battered by years of declining demand at home. The processors, including JX Holdings Inc. and Idemitsu Kosan Co., now face rising competition for sales in Asia, the world’s biggest oil market. The ministry fears that China’s move to adopt stricter fuel standards will spur regional rivals into producing higher quality products, forcing Japan out of the market. “We’ve been saying for more than 20 years that Japanese refiners should become stronger,” said Hidemasa Nishiyama, director of the trade ministry’s petroleum refining and reserve division. “The external environment has changed: the capacity of China and other countries is becoming excessive, […]

A Sign Of Slowing Demand? Chinese Refiners Reach Crude Import Quota

22 Mar 2017   China

China’s independent refiners known as teapots have used up the amount of imported crude that the government allocated to them in January, which means imports are likely to slow down through June, Platts estimates . That’s the month when Beijing will hold a second round of quotas. The January quotas had 45.64 million metric tons of imported crude distributed among the teapots, most of which has already been processed. This amount is close to that allocated to teapots for the whole of last year: 60 million tons. As a portion of total Chinese crude oil imports, the 2016 quota allocations were equal to 16 percent. The reason for the premature emptying of the tanks was that the 2017 allocations were based on how much each independent refiner had imported in January-October 2016, so those whose imports were higher in the last two months of the year received a lower […]

How Tesla Just Tripled Its Earnings In China

21 Mar 2017   China, Electric Cars

Earlier this month, Tesla Inc reported that its revenues in China topped $1 billion in 2016, more than triple the revenues it generated there in 2015. The Chinese market was only second to the U.S. in terms of revenue generation for Tesla last year. The electric carmaker is not breaking down revenues by items, and has not offered any explanation for the triple revenues in China. The revenue jump could have been the result of China’s license plate-issuing policies in major cities that fast track EV license plates issuing as the country grapples with perpetual pollution and traffic jams. Tesla’s Chinese revenues last year were $1.065 billion, compared to $318.5 million in 2015, and $477 million in 2014, the EV carmaker’s regulatory filing from March 1 shows. According to Reuters Breakingviews ’ Robyn Mak, one of the key contributors to Tesla’s soaring Chinese revenues is the local green-car, or […]

Analysis: Chinese independent refiners’ crude oil imports set to slow on quota issues

21 Mar 2017   China

Crude imports by China’s independent refiners are expected to slow down in the coming months as several refiners have used up most of their allocation from the first round of import quotas and will need to wait until June for the second round before resuming purchases. Independent refiners need government-allotted quotas to import crude oil. A total of 45.64 million mt of quotas were allocated to 19 independent refineries in the first round in January. The refiners have submitted applications for a second batch of quotas, but the government is only expected to allocate fresh quotas in June leaving the refiners with the option of either reducing throughput or buying barrels from the domestic spot market, market sources said. China’s independent refineries imported a total of 60 million mt (1.2 million b/d) of crude oil in 2016, according to S&P Global Platts estimates. This represented 16% of China’s total […]

Beijing, Saudi Arabia agree to more oil cooperation, exports to China

20 Mar 2017   China, Saudi Arabia

China and Saudi Arabia will increase their cooperation in the oil sector, including in Saudi oil exports to China, the two countries said in a joint communique issued on Saturday at the end of Saudi Arabian King Salman’s visit to Beijing. The world’s largest oil exporter has been looking to cement ties with the world’s second-largest economy. After losing market share to Russia last year, Saudi Arabia has sought to boost oil sales to China, the world’s second-largest oil market, by working mostly with China’s top three state oil firms. “Both countries are willing to raise their level of cooperation in the oil sector, including supplying Saudi oil to the continuously growing Chinese market,” the two said in […]

Beijing, Saudi Arabia agree to more oil cooperation, exports to China

18 Mar 2017   China, Saudi Arabia

China and Saudi Arabia will increase their cooperation in the oil sector, including in Saudi oil exports to China, the two countries said in a joint communique issued on Saturday at the end of Saudi Arabian King Salman’s visit to Beijing. The world’s largest oil exporter has been looking to cement ties with the world’s second-largest economy. After losing market share to Russia last year, Saudi Arabia has sought to boost oil sales to China, the world’s second-largest oil market, by working mostly with China’s top three state oil firms. “Both countries are willing to raise their level of cooperation in the oil sector, including supplying Saudi oil to the continuously growing Chinese market,” the two said in […]

China’s Crude Oil Production Falls 8% Year Over Year

17 Mar 2017   China

China’s crude oil production dropped by 8 percent annually to 31.44 million tons in January and February, as high domestic production costs prompted refineries to import more crude oil, according to data by the Chinese National Bureau of Statistics (NBS). In the first two months of this year, the total crude processing volume stood at 90.76 million tons, up by 4.3 percent compared to the same period last year. Crude oil imports, on the other hand, rose by 12.5 percent to 65.8 million tons, Xinhua news agency reports, quoting NBS figures. Despite the higher global oil prices at around $50 this year, compared to last year’s lows, Chinese refineries still preferred to import crude rather than buy domestically produced oil due to the high production costs, NBS noted, as reported by Xinhua. China’s domestic crude oil output faltered in 2016, after the oil price slump pushed many of its […]

China, Saudi Arabia Ink $65-Billion Worth Of Preliminary Deals

17 Mar 2017   China, Saudi Arabia

China and Saudi Arabia have signed preliminary deals that could be worth as much as $65 billion if finalized, Xinhua reports . The news came on the first day of a four-day visit by Saudi King Salman to China. China’s Deputy Foreign Minister Zhang Ming said that President Xi Jinping and King Salman inked a total 14 cooperation agreements, including a memorandum of understanding on 35 projects for “production capacity and investment cooperation”. Among the industries that the agreements cover are oil production, petrochemicals, and even space. China is a crucial market for Saudi oil, and the king’s visit is widely seen as an attempt to secure future exports, preferably under long-term contracts, which is the standard approach of the Kingdom toward crude oil exports. Outside oil exports, Saudi Arabia is also looking for opportunities to expand its refining and chemical production markets, Reuters notes , as part of […]

China’s crude oil output falls 8 pct

17 Mar 2017   China

China’s crude oil output fell 8 percent year on year in the first two months of 2017 as refineries slashed production and imported more due to high exploitation costs, data from the National Bureau of Statistics (NBS) showed Thursday. Crude oil output came in at 31.4 million tonnes during the period, while imports gained 12.5 percent to 65.8 million tonnes. Although the global oil price has hovered around 50 U.S. dollars per barrel this year, domestic refineries still opted for more imports due to high production costs, according to the NBS. In the first two months, natural gas output totaled 25.2 billion cubic meters, unchanged from the same period last year. Imports of natural gas grew 7.5 percent. China aims to increase domestic crude oil output to 200 million tonnes by 2020, while supply capacity for natural gas should exceed 360 billion cubic meters. […]